Hongkong'S Retail Industry Is Showing Signs Of Recovery, Retailers Switch To E-Commerce

Hong Kong

After two years of downturns and a long downturn, the recent recovery has come to an end.

"We believe that the worst is over and the retail industry in Hongkong is gradually improving.

The opening of Hong Kong Zhuhai Macao Bridge and Shenzhen Hong Kong expressway is expected to bring more business opportunities to Hongkong.

Guo Shaoming, chairman and chief executive of Sasa group, said on the 23 day's performance meeting.

Sasa announced that in the 6 months ended September 30, 2017, the turnover of the company was HK $3 billion 660 million, an increase of 1.6% over the previous year, of which HK and Macao retail sales amounted to HK $2 billion 950 million, an increase of 2.2%. The company's profit in the period was HK $190 million, an increase of 14.5% over the same period.

According to the world clothing and shoe net, the number of visitors to Hong Kong increased by 2.2% to 42 million 640 thousand passengers in the first half of September this year. The number of mainland tourists increased by 2.5% to 32 million 500 thousand.

Data released recently by the statistics office of the Hongkong Special Administrative Region (HKSAR) showed that the total retail sales in Hongkong in September were estimated to be HK $35 billion 700 million, up 5.6% over the same period last year, the highest since February 2015.

At the same time, since March this year, Hongkong's retail industry has been rising for seventh consecutive months.

Due to the improvement of retail market, local retail leaders in Hongkong have begun to re adjust their shop plans.

Guo Shaoming disclosed that as the rental of retail shops in Hongkong has dropped sharply in recent years, the company has chosen to integrate the shops. "We will relocate some shops on the upper floors or poor locations to better locations, and add new shops in the residential areas of the people's livelihood."

As of the end of September this year, Sasa's number of stores in Hong Kong and Macao has been maintained at 115, the mainland.

It reduced two to 54.

Recently, Zhou Dafu also announced the interim results show that as of September 30, 2017, six months, the total sales amounted to HK $24 billion 754 million, an increase of 15% over the same period.

Meanwhile, sales in the same stores in mainland China, Hongkong and Macao are all positive.

According to the financial data, Zhou Dafu's total sales amounted to HK $24 billion 754 million, up 15% from HK $21 billion 526 million in the same period last year.

Gross profit was HK $717 million, up 4.9%.

The main operating profit increased by 40.3% to HK $240 million from HK $171 million in the same period last year.

With the improvement of the overall atmosphere of consumers and franchisees, Zhou Dafu executive director Zheng Zhigang revealed that there is no need to continue to reduce the number of stores at the beginning of the next financial year.

Zhou Dafu has 2488 stores in the world, of which the number of stores in the mainland market has increased from 112 to 2358, while the number of shops in the Hongkong market has decreased from 8 to 112.

It is worth noting that densely populated Hongkong has a wide range of pportation networks, shopping convenience, and the online shopping market is lagging behind.

According to the statistics of Nelson, a consultancy, online shopping accounts for less than 5% of the total retail sales in Hongkong.

In sharp contrast to Hongkong, the mainland online shopping platform has seen explosive growth in recent years. Hongkong's traditional retail leaders saw opportunities and began to actively layout e-commerce business.

In fact, Sasa has been developing the proprietary line since 2015.

Platform Sasa.com, but because of the high logistics cost, it has not yet turned the corner.

To this end, Sasa announced at the end of September this year to increase another electronic business platform, "Tmall Sasa official flagship store", hoping to use the third party online platform to drive the company's e-commerce business.

"In the past, our online shopping business has been losing badly. We hope to achieve balance of payments as soon as possible next year.

The number of double eleven Tmall platforms this year accounted for 30% of the total online shopping business, and the single day turnover increased by 36%.

At present, Sasa has set up stores in many large online shopping platforms such as Jingdong and Tmall, which helps to improve the overall online shopping business.

In the future, we will continue to cooperate with more large-scale e-commerce platforms. "

Guo Shaoming said.

Sasa.com has increased its turnover for 3 consecutive years since 2015. Its sales volume decreased by 6% to HK $177 million from the end of September, accounting for 4.9% of the group's total revenue.

However, the net loss of self purchase online shopping platform dropped from HK $33 million 900 thousand in the same period last year to HK $16 million 300 thousand.

Sasa said that in Hongkong and Macao, the store network will continue to be strengthened in the future, such as moving the shops upstairs in the past to some better location downstairs, improving the residential area, pportation hub and the network of shops near the mainland.

At the same time, a new mobile APP is introduced to improve customer participation and improve the overall supply chain management by using automated processes and new warehouses.

Guo Shaoming said frankly: "physical retail stores are very important, although the emergence of online shopping platforms will bring more competition to offline retailers.

But we believe that the future development of online and offline must be double line, which is the best development strategy.

Zhou Dafu also said that the company will continue to expand the retail network, mainly concentrated in the expansion of the mainland business.

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